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Ukraine 64, Russia 45, Us 30, U.s. 26, Crimea 25, Europe 17, Vladimir Putin 12, Qualcomm 11, Becky 8, At&t 8, Kiev 8, Washington 7, Moscow 7, Geico 6, S&p 6, Georgia 6, Ben Horowitz 6, Joe Kernen 5, Andrew Ross Sorkin 5, Warren Buffett 5,
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  CNBC    Squawk Box    Business news and talk as the  
   trading day unfolds on Wall Street.  

    March 4, 2014
    6:00 - 9:01am EST  

good morning, everybody. i'm becky quick along with joe kernen and andrew ross sorkin. our global markets are rebounding after easing tensions in ukraine. this morning, russian president vladimir putin ordering troops engaged in military exercises along the ukraine border back to base. perzs that t exercises that were linked to kiev. john kerry is set to arrive in kiev in just a few hours to show support for the new ukrainian government. as we're speaking, vladimir putin is holding a press conference. you can see right now, take a look at the market reaction as dow futures are up by 162 points. that would be gaining back more than the losses of yesterday. this comes after monday's tumble where you did see stocks lower. right now, the major european averages are higher.
the dax in germany up by 1 is.5% and the if it cac in london up .7%. right now, stocks are up about 6% in moscow. yesterday, the stocks in moscow were down close to 11%. joe, right now, over to you. >> that 60 billion number is familiar. >> it's more than the olympics, right? >> yeah. this must have gotten vladimir's attention, yeah. let's check some of the other markets this morning. oil and a lot of the commodities were up yesterday. they're easing a little bit today, as you can see. that will bring some relief. check out the ten year. the ten-year has been, obviously, trading on things other than the situation in ukraine. but 2.65, still well under control. the dollar has been interesting. the euro has stayed strong. they're calling this the biggest
crisis in europe in the 21st century. the 21st century is like 14 years, right? it would not be the biggest crisis in the last two centuries, by my reckoning. >> i would agree with that. >> some other stuff happened. and then gold was already rallying. it's interesting the way gold has moved up so much. and then the ukraine situation just accelerated. >> every once in a while. >> spring is supposedly -- it's like two weeks away? >> yeah. >> through a white in the winter to stay warm and i didn't -- it didn't make any sense. >> it absorbs the color.
>> who said that? >> it might have been in the "wall street journal." i could be wrong. >> it wouldn't be the first time. >> it would not. >> but i didn't know -- when did you start reading the journal? and number two, i would normally -- did you write a column today? >> i did. >> you wrote it in advance? >> i did. i did. >> that's you. you've got your homework done early. you did it last week? >> no, no, no. i did it over the weekend. >> oh, you did? >> yeah. >> wow, what a pain. i hope it's worth it. >> i hope it's a good article. check it out. >> all right. >> we've got corporate news to get to. dish network and disney are striking a long-term carriage deal. the nation's second largest satellite tv provider is going to be delivering content from disney owned networks like abc and espn outside of traditional tv subscription. dish will offer disney content on smartphones, tablets and computers. the deal is setting the stage
for a very new wave of broadband delivered to video services. take a look at shares of disney on this news. after hours, up margin. you can take a look at shares of dish and you can see it up, as well. if you have comcast, you can see these things. >> some of the things you can get on your tablet. some you can't, not yet. the question is whether apple or others who try to get into this space -- once you start allowing people to do it, how that really affects it. that is the bigger question. >> you've watched tv on your tablet? >> i have. have you? >> no. i like tvs. >> it's more for traveling. if you want to get access to something. but this story is -- >> you need wi-fi, right? >> you do need wi-fi. >> whenever i try to get wi-fi, it has a little padlock thing.
i don't know. can you get through those things? >> no, i struggle with those things. but you can do it if you have service -- >> you just need to remember the password. this next story, by the way, talk about watching tv on your ipad, broadcasters just won a legal fight against area. the justice department saying the start-up service streams local tv signals over the internet, it is now clearly infringing on the copyrights of broadcasters whose content is being streamed without permission. it's available in 13 markets. customers pay $8 to $12 per month. what you can do in all that is get local tv stations and r abc, nbc, cbs over the air. the government is saying this is a problem. aeeo backers include ari diller
and -- >> but this is a big deal. aereo has won in all of the court cases up to that point. is this justice department the final say on this? >> i believe this will be appealed and the game is not over. >> the wins that aereo has -- >> well, there were smaller courts along the way. but the justice department i think has a little bit -- >> well, the question is it's free over the air stuff. they've created this -- >> they say they have an antenna for everybody. >> a little bitty antenna as big as your fingernail for every single person. it's clearly infringing on what the spirit of the -- >> sure. >> it makes the content worth less. you're a content provider now. >> i am. >> what did you think about that? it would be nice to get paid for it. >> it would be. let's get to steve sedgwick in kiev right now. steve, bring us up to speed. the markets have a clear
reaction that tensions are starting to wind down. >> well, that might be one interpretation, but quite frankly, the tensions are still here. there are still up to as many as 16,000 russian military personnel in their country, in sovereign territory of the ukraine. i spoke to the prime minister yesterday. he said no more -- from russia on the ukrainian soil. then there can be a rebasing of the relationship. i spoke to the ukrainian minister and he said basically the coffers are empty here. he expected a form of deal within the next four days for emergency financing. that may tide them over for the very short-term. elsewhere, mr. kerry is due in town today to show his support
for this government in kiev. but what is also fascinating is that vladimir putin, the russian president, is speaking about the ill legitimacy of the government in kiev. he is saying there is only one true russian president. he said he couldn't understand the motive of those governments, including the u.s. who are supporting what he calls s coupe te. he is saying that they went into the crimea as the government in russia said previously to protect russian interests against fears for their lives i've been speaking to a whole host of people and they deny that any stage of human rights or the interest of russian speakers both in the crimea or in the east of the country, where they're threatened, as
well. what the business community has been saying, and i spoke to the ceo of the biggest investment bank here in the ukraine, thomas baylor, from draggan capital which has a goldman sachs investment in it, as well. he said he's been here for 17 years, he speaks fluent russian and he has never seen any threat to russian speakers in any part of the country. putin speaking to the imf in town, kerr ri is in town. as you say, becky, it is important at least to have the russian forces who are playing war games in the west of their country to the east of this country have gone back to barracks, and that is something to be thankful for and i guess that is why the markets are seeing a little more risk on today. back to you guys. >> steve, thank you. you point out that this is a complicated situation and with the comments coming from putin, as you mentioned in the speech that he's given right now, calling this an unconstitutional coup and then the leadership in
ukraine. it sounds like this situation is going to be here for some time. in the meantime, washington keeping busy with the war of words between the white house and russia. president obama's budget is being released today. for more on all of these stories, let's get to our chief washington corespondent john harwood. john, the comments coming from putin, how does the white house end up interpreting these things? the ideas he's saying this is a coup de tea. >> he's expected to pull the sanctions on those involved. i've been reading these comments as they've been coming across the wires. he said there was no need for
russian military intervention in the rest of ukraine. they have called an end to the one military exercise. so there is at least the possibility that russia has decided to make its point and pull back. but for now, the russians are moving ahead in trial to rally around the world. >> yeah. you can see that he's called them back to barracks, but as steve was just pointing out, if this is a situation where they want no more russian boots on the ground, if they're asking to have moscow completely leave that base, that might be a different story itself. what steve pointed out is the situation is dire from a financial perspective, too. they need money and they need it now. is that a like hi scenario that something could be put together quickly with the imf? >> yes. you've got an imf team that is going to be on the ground for ten days in kiev and seblth kcr
kerry arrived today for the purpose of discouraging the ukrainian government to do anything from exacerbating the tensions and trying to get an aide package through. the administration has talked about a $1 million of loan guarantees and now members of congress, the president yesterday afternoon in his photo-op with israeli prime minister netanyahu says he wants congress as soon as they come back after the delay in business because of the weather problems here in washington to work on a set of aide programs and they're doing exactly that. so there is aid getting mobilized. both sides are moving or were moving from both directions. pro ukraine and sanctions on russia. and the question is going to be what does vladimir putin decide is in his interest and does he decide to pull back and avoid
further costs. >> are you using exacerbate correctly there, john? i don't know wlu saw cate blanchett the other night when she said thank you mr. day lewis. this award coming from you exacerbates this honor. and it blows it right out of -- >> you know -- >> these actors -- >> i heard cate blanchett say that. >> she's so elegant and smart. what the hell did she mean? >> i think she mangled it. hey, joe, did you see travolta? >> she mangled it as bad as travolta. >> all these letters together and some of them, the spaces between some of them. these actors, man, if they don't have a script, andrew. i'm sorry. >> hey, joe? >> yeah? >> do you know slate magazine came out with their travolta fire for names? you plug your name in based on what he did to adena menzel and it will give you your travolta
name. >> it exacerbated the whole situation. >> i have a kinship with john travolta given the way i pronounce people's names. >> vladimir's name is in the -- >> and i butcher that. >> he shags a lot. >> hey, andrew? >> yes? >> vladimir putin's va volume ta name is victoria prazeese. >> do you want you want to talk about the budget? >> yes. >> go ahead. >> we're going to have a duelling set of documents from the administration and from republicans over the next few days because the house republicans are come out with baujt. we've had a peace treaty between patti lions. but both sides are going to lay out blueprints for what they want to come on publish, their
campaign manifestos, democrats wanting higher levels of investment, investors programs as well as tax increase, republicans wanting lower taxes and less of that spending. they will fight it out in the midterm elections and then we may return to budget talks and some sort of accommodation in 2015. >> john, how real is the return of the conversation about tax and interest? i say it in part because it's in some of these bills, but also because the front page of the "wall street journal," see this right here, blowout call for big tycoons that talked about the payout for people like leon black, $560 million with his income, 465 for steven schwartzman and others. i do know it's been put back in some of the bills, but this has been a policy debate we've been talking about for about five
years now. >> there's a lot of momentum behind this issue. i would not expect it to pass this year. one of the things that adds to its momentum in terms of the long-term, which we really get to a tax reform discussion which is not going to be this year, is that dave camp, the republican chairman of the ways and means committee, included this interest in his tax reform bill. the administration will have it in its budget in part to pay for an expansion of the earned next tax credit, part of the president's inequality agenda, something to reward low wage workers for expanded work effort and expand that program to some young childless men. but i don't think they can get over the finish line. i don't think any tax increases are going to get over the finish line this year. but that is the tax break that many on wall street themselves think is unjustified. the question is when is there a critical mass for some sort of overhaul in the tax code rather than trying to do it in lypo
shots. because it's -- you're always going to find on resistance to specific elements unless you have the context of a broader deal. that's why the administration has pulled back from its budget this idea of overhauling the cost of living adjustments for social security and other programs. they're saying, yes, we support doing that if we get other things and republicans are likely to say the same thing. yes, we'll get rid of carried interest if we do other things, get some rates down in other areas. >> one thing i had to do seen before was another loophole that i believe the president has been talking about. he was calling it the gingrich loophole who is calling it -- i am not aware of this. this is the first i've heard about this. but this would be something to make sure high income professionals are paying payroll taxes that other workers pay, talking about removing the limit on social security taxes. >> i think it has to do with the way some individuals organize themselves as businesses and have employees and don't -- and avoid some of the traditional payroll taxes.
it's analogous in some ways to what householders have done in the past with domestic health and, you know, there's been a big push over a long period of time to get everybody to pay payroll taxes for people who work for them. and i think there are high income people who in their business arrangements have put things together in a way ta they have not had to pay those. >> john, thank you very much. we appreciate it. >> yeah. i don't know. it's beyond my apprehension. >> what? >> you know, my apprehension that she -- >> i understand what you mean. >> i know. but in the history of the oscars, that was unparalyzed that someone -- you know what i'm saying? >> i do know what you're saying. >> google. yeah. >> we should point out, later on "squawk box," house budget committee ranking member chris van holen will be our special guest at 7:40 eastern time. coming up, new epa rules
creating a bit of controversy at the pump. plus, do you know how much our national parks contribute to the economy? they're not just towering forests. they are making a lot of money. really? so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential?
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♪ time now for the executive edge. the epa unveiling new rules to try and cut smog and toxic emissions to try and combat asthma and heart attacks. the government wants to cut sulfur level necessary gasoline by 60%. it will be phased in between
2017 and 2025. refiners are calling the compliance schedule unrealistic and warning this could raise gas prices eventually by significant amounts. autoworkers are generally welcoming the national standard for gasoline. but i think they were saying something like 9 cents a gallon it could eventually cost. the epa was pushing back and said they didn't think it would be that much of an increase. >> they said a penny a gallon. >> the epa apparently estimates the final numbers would provide $13 billion in health benefits for every dollar spent to meet this standard. those are very hard numbers to estimate. >> how do you measure health benefits? because, look, if you're -- it's just hard to put a number on it. >> it's hard. i don't have a problem with sulfur. we're not conflating, we're not -- >> flinging crap here. this is -- sulfur is a pretty disgusting compound, particularly when it gets into the air. >> gives people asthma. >> you can see smog.
when you see what's in china, that's not the 0.04%. that's all this disgusting air pollution. this is just a story about making sure you're not -- for the pup health, you make sure you're not hurting economic or job growth or -- >> and then, therefore, the question is is it too quickly or not? i think we all think they should be phasing it at some point because it's better for -- >> not a big difference between 2017 and 2025. my guess is it would take some pitt big capital expenditures and building that might take a little bit of time. >> with the industry -- is the industry posted across the globe or is it just imposed with t edo the schedule? at some point, i imagine they probably would be opposed to it, anyway. i don't know whether -- i don't think they -- >> a lot of times it's the capital expenditure cycles, like when you talk about the retailers and wanting to get
these new swipers for the new cards that have the chip in them, they say, look, about every three to five years, thend up replacing all those things, anyway. the question is do you do it by next year because of the security issues. my guess is it's a similar situation here. do they make upgrades before they would normally be upgrading? >> we have make jackson on here, coming up. it may be single digits outside for much of the nation, but spring and summer will arrive eventually and that means vacations. our national parks are major destinations. recreational visits to the national park system resulted in $14.7 billion in spending in 2012 and gateway communities. those are within 6 of 0 miles of the park. if you factor in the secondary effects of that spending, those expenditures supported 243,000 jobs and contributed $26.8 billion to the national economy. guys, i think part of the reason
this is coming up is because under some of the budget cutting in the past, they've closed the parks. they were trying to point out what that minutes for the communities around them. >> some of the greatest national treasures. >> absolutely. if you're going to travel in the united states, how much -- is the to the parks? a lot of it. >> we've been trying to see how much of the national parks we can get. there great national parks all over the place. >> it's true. disney world, universal, six flags. >> oh, we've been trying to knock off a lot of the national parks. where i haven't been yet is yellow stone. >> jelly stone. >> very, very cool place. >> i have been to jellystone, believe it or not. the jelly stone rv park when i was a kid. >> what game first, yogi bear or gogi beara. >> yes.
>> i think yogi berra. >> i'm not going to say either, because i feel like i could look really stupid either way. >> i'm going to find out. >> you look it up, andrew. >> yogi, the cartoon, might not be as old as when yogi was a great catcher. >> that's what i'm guessing. >> or he could be that old .maybe that was his nickname. nobody gets named yogi. >> deja vu all over again. >> his real name is larry. >> is that true? >> larry berra. >> yogi has a better ring. anyway, when we come back, an up-dale date on this morning's rebound. plus, did the weather put the brakes on auto nation's sales? mike jackson rolls out the results here on cnbc. and the prophet marcus lemonis has a big decision to make tonight. also, as we head to a break,
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welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin. the headlines this morning, russian president vladimir putin has ended a military exercise in western russia, a move that is at least partially diffusing the tension over the situation in ukraine. and responsible for this big pop we're seeing in our futures here. in a news conference this morning, putin says the use of military force in russia by ukraine would be legitimate and in line with international law. he said threats from the west is counterproductive and harmful, but added russia is not considering an annexation of even just the crimea region of ukraine. i was ready to give him that yesterday, as long as he -- you know -- well, as long as he -- the way georgia is, there's places -- crimea has long by, really, a part of russia. and you can see there's a lot of russians there. and he could almost make the case that he's protecting russia there. >> and you could also make the case that it's --
>> i'll tell you, i thought he was going to take the whole thing. >> but i still don't know. that's why i kept thinking about -- we still don't know. >> he's put them back in the base, but i don't think there's any way to agree to remove the base from that region. >> he's got a lot of really nice stuff, natural resourcewise, in ukraine. >> interests we don't have. >> we can't do anything except, like, mess with his markets. >> the people of the ukraine -- of the ukrainian region, that's that entire country, is in 60/40 from the best we can tell on how things went. you don't know how these people feel about these situations. >> and then, you know, germany, you know, thought that they had orchestrated this closer ties to the west.. they're scared to death that russia -- they get all their energy from russia. they're worried. so here at home, president obama
is going to unveil his -- what a concept, a budget. the 2015 budget plan today. >> we've got one every year. and among its divisions an expansion of the earned income tax credit designed to help lower income americans. the budget is having little chance of passage in the republican-controlled house. and in house budget committee ranking member chris van holen is going to tell us about that when he joins us later this hour to discuss the budget proposal at about 7:40 eastern time. and the controversy over bitcoin, a prime topic in japan, the country's finance minister says the country is still investigating the collapse of mt. gox, which was based in tokyo. it's still uncertain whether illegal activity was involved. and new york state's chief banking regulator ben imam lochti, says that that collapse ultimately could be a positive for digital currencies -- we've got to get these bad actors out of here. it's growing pains, i know.
>> in the 8:00 hour, mark's partner -- >> there will be more supervision. >> back to 700. >> i want to talk to him about it. yesterday we talked to warren buffett about it and he said the properties and wouldn't be surprised in terms of 20 years if it's gone. it will be great to hear from wo horowitz today. you'll see right now that the futures are up sharply. it looks like they would gain all the losses from yesterday if we were to reopen at these levels. right now, the dow up by 167 points. yesterday, the dow lost 153 points. s&p yet was down by about 13 points. this morning, it's indicated higher by almost 20 points. similar trends in europe, if you watch the markets there. because as it looks like some of the tensions are stepping down, we have seen these markets continue to climb, even as putin has been speaking in the last half hour or so. right now, the dax is up by better than 2%. the cac in france is up by 2.3%
and the ftse in london up by 1.6%. overnight in asia, while things were a little mixed there, the nikkei was up by about 0.5%. the shanghai was slightly lower. oil prices have been another market that we've been watching ves closely. price res down, but down from very high levels. right now, down by about 1.4%. still, w at this is above $103 at 103.45 a barrel. the ten-year is yielding at some point 2.645%. we saw a build in the treasuries yesterday with some of the concern. we take a look at the dollar right now and the dollar obviously much stronger against the ruble. if you look at it now, it's down slightly against the euro. and the dollar/ruble, 36.09. some big movements yesterday giving back the strength we had seen yesterday for the dollar. finally, take a look at gold prices and you'll see they've come back, as well. right now, gold prices down by about $13. again, if you -- we'll be keeping track of the gold prices, which have been on a
real run lately. erp down by about $13 earlier. right now, down by about $12.50. february, auto sales came in weaker for nearly all the major auto sales. gm, toyota and ford saw losses from last month. the big winner, fiat chrysler. auto nation, mike, i used to think of you as kind of a sunbelt company where all your -- you know, where a lot of your dealerships are located. to go south, whether you have to go to ecuador before you get like 60 or 70 degrees. even your georgia locations were cooler than -- you see, i would say colder than hell. that makes no sense, cate blanchett. anyway, it was cold, right, mike? >> yes, joe, but you don't have to go to ecuador to get beautiful weather. all you have to do is come to florida where we had fantastic
weather. by the way, there's -- no, all of florida. by the way, there's no state income tax in florida, either, and our sales in florida were unaffected by bad weather and we're up 8el%. so we retail 22,000 new vehicles in the month of february. that's plus 4%. but you're absolutely right, the industry was overall flat for the month of february. and we need to step back and look at this, joe. if i go back for the previous six months, the industry sales are up 2%. now, within that, we have the government shutdown and now this horrific winter. but what it means is we're either about to have several very big breakout months or the industry is not on track for 16 million units this year. now, i'm still in the camp of forecasting 16 million and i think we'll have is some big months coming up. but i do obvious that we now have six months of very tepid industry sales increase of only 2%. >> yeah.
if people do sort of put it off and then you get it back later, you would think that we would have some built up demand. that would be good. i guess there's still luxury to have and they're still doing pretty -- up 7% for things like -- >> yeah. the premium luxury business tons to be very strong. the economic recovery in the u.s. is very much a bifurcation with the high income people doing extremely well. you know, the issue has been discussed add nauseam. what you have, a tepid economic recovery is only 2% with strong appreciation. that's what you get. >> what's going to happen with tesla and texas? you know, you have, in the past -- he -- i don't know whether he is or not. i think he kind of is. you're a fan of the car, i know. but you -- at this point, there's still a lot of -- you
know, when you think of the company and how well it's going, it does get a lot of help in terms of tax advantages through either the states or the federal government to be that profitable. that's the point you made, right? >> yeah. and, joe, as far as tesla's retail distribution model, retail model, i think tesla should have the right to decide how it wants to retail its vehicles. and i do not view it as a threat to franchise auto dealers or a threat to autonation in any way. and that should include the great state of texas. and autonation has not supported or helped any of the entities that are legally resisting tesla's retail model. >> mike, now, i believe ultimately when tesla wants to go to higher volumes and needs
service capacity when there's more teslas on the road, they will move to the franchise model down the road, several years, and elon musk has indicated that he thinks that's a possibility. so that's my expectation. >> if elon called you after the show, after this appearance and said, look, i want to be your friend, i also want to -- i want to sell car toes autonation, you know, for the next two months, would you do it? >> he won't. >> he won't. >> no, no, it's -- i don't think elon is prepared to take that step and i don't think he needs to take that step at this moment. ultimately, though, i will not be surprised if my phone rang and elon wanted to talk about retailing through autonation. and i would be completely open and supportive to doing that. as i said before, i think it's an excellent product. there would be a separate conversation as to whether the multiple that is on tesla's earnings which are -- still have heavy government subsidies is a
good investment or not. that's a separate question. but i think he's got an excellent product and i think -- >> mike, real quick before you go, there's news out of washington, the obama administration announcing these news fuel -- >> yeah. that absolutely had to happen. you can't sell the auto industry to go to dramatically cleaner air standards and not clean up the fuel. the petroleum industry has to clean up the fuel. >> thanks, mike. >> andrew -- thanks, mike. we'll see you soon. one of yogi's friends when he was young, called him that because of the way he sat, cross legged. larry berra was yogi berra. yogi berra came before yogi bear. >> and for you, because you do yoga and because of your love of
the downward dog -- >> i want to do yoga, i can't do yoga. >> can i call you dog, like randy, because of your love of the downward dog? >> you already call me dog. >> i do, dog. coming up, we've got more on the markets -- >> the markets hoping it's not a dog. plus, sanctions and economic pain, will it work on russian president vladimir putin? we're back in a moment.
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welcome back to "squawk box." its time for on your "squawk box" planner for this fast tuesday. in earnings central, auto zone and bob evans, they are among the companies expecting to report today. the economic calendar light today, but tomorrow we're going
to get the adt employment report for february. a lot of people will focus on that. president obama's fiscal year 2015 budget proposal, that's going to be a release a month later than the deadline. that is your squawk planner. coming up, we have much more on the crisis in ukraine. president obama's policy response. but first, the prophet and his mission to save small businesses from going bust. marcus is going to -- he tries his hand in the meat market. but will it turn out to be a rotting investment inspect back right after the break. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today.
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welcome back. a new episode of cnbc "the profit" airing tonight. here's a quick preview. >> hey, guys, we have to talk. we have a problem. i just got through talking with jamie. and there's a $3 million hole that you can't explain and you have $30,000 in the bank. are you aware of that? >> no. >> no. >> the deal that we made was based on 2 million in payables. not 4. right? >> right. >> guys, this is bad. all these people out here that are scared to buy a car because they're scared they'll lose their job, they have a reason to be scared. this business is two weeks away from closing. >> we're not walking out. we're not going -- you know, we're going to try to make a go of it. >> things are way worse than you think they are. >> where do we go from here.
>> you said to me you thought the business was worth 15 million. to me i think it's worth 15 bucks. it's frustrating. i've lost confidence. not in you guys as guys but from a business standpoint, right now, i don't think this is a good investment for me. >> star of that show, the turnaround king, marcus lamonis. if you haven't seen the show, marcus invests his own money to help struggling businesses to make a comeback. that was a tease. you say in that piece that we just saw you say you're not investing. is there a silver lining in this cloud? a little bit? >> i wish there was a silver lining. at the end of the day, these people, classic case of not knowing their numbers. it wasn't like their books were off by $200,000. i describe in the show as an insolvency gap which i thought
was $1 million. the gap came back at $3 million. their bank loan is tapped out. this is a small business but it's still a $50 million business. >> this goes to the whole issue of due diligence. how often on moment one do you have one view and think thorrally a week or two later, the numbers are totally different? >> you know, unfortunately i don't do a lot of due diligence before i get there. the reason is i want to take the viewer through the due diligence process, i want this emto understand how i arrive at the numbers, how i go through the books and records and arrive at the process. the negotiation is usually based on what they tell me. i want to understand what the variance will be after that negotiation. and the due diligence process in this case did not work out for them. >> how common is something like that in small business? that sounds like a heartstopping problem to walk into, to realize you don't know what's happening to the money or the product. >> it's common but i think this business is a little bigger than a small business.
it's a 75-year-old business that did $50 million in transactions last year. they had receivables on the street of over $4 million and they weren't collecting them. for them not to know their numbers and me to go in their break room and see books and book and records of accounting and receivables and payables and not have a sophisticated system in place is typical but not in a business of this size. >> part of the theme of episode 202 was the idea of business consolidation. >> it's a $50 million company but there are 15 to 20, $10 million to $20 million players in the marketplace. the goal was to take their fixed cost infrastructure, rip out as much sg & a as i could without touching the labor pool and consolidate a number of other players and put them into this fix cost structure and see the ebitda go from what i thought i could get it to 400,000 on their wais to 2 million or 3 million bucks and have it be a nice classic sale process. >> how hard do you think that is
for a small business guy to implement? you've done it before. if i own a small business and say to myself, the real opportunity here is to hook up with five other guys down the street. >> well, i think in today's day and age, if they don't start doing that they're not going to survive. the sum of the parts are always going to be more effective. i don't think a small business guy can do it. but they'll have to start to figure it out. >> marcus, thank you for joining us. the show "the profit." >> is this meat company going to go to the glue factory? that was a bad metaphor. they don't sell horse, do they? >> they don't sell horse. just the fabrication of the meat -- it's not a slaughterhouse, it's just meat packing. >> they have good products, though, what would i find? >> so the number one product you'd see would be the brooklyn burger. they're sold in grocery stores. they're also the primary vendor to peter lugar's, a famous steakhouse. >> no kidding. >> good company.
was a good company. >> saw why you saw potential there. that will be interesting whether you were able to -- on 50 million, i was thinking, wow, how could they be so off. when you're doing 50, you think you have 4, you really have 2. it makes a huge difference. >> no, no. you can't be off by $2 million. i did an interview with a reporter yesterday and she asked me if i thought they were definitely dishonest about their presentation? i don't think they were dishonest but if you're off by 2 million bucks, i don't know. >> they look like butchers. i trust them. they look like meat guys to me. a brooklyn burger sounds pretty good. anyway, thanks. when we return, we'll talk about investing around a geopolitical crisis. how to deal with volatility and wild market swings. also, russian president vladimir putin speaking this morning. that is coming up on "squawk box" at the top of the hour.
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global markets rebounding, a possible ease in tensions between russia and ukraine providing a positive spark this morning. how should you invest around a geopolitical crisis. threats of sanctions and economic damage, will any actions the u.s. and eu take be enough to sway president vladimir putin? let the budget battle begin. president obama ununveils his plan for taxing and spending. chris van hollen goes over some of the big details as "squawk box" begins right now.
good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching futures this morning and there is a big bounce back after yesterday's declines. you can see right now, the dow futures gaining back everything they lost yesterday. up 158 points right now above fair value, s&p futures up by 18 points above fair value and the nasdaq is up by 40 points. the ten-year note at this point is yielding 2.661%. in our headlines, the main story is the tension over the situation in ukraine. it seems to be lessening this morning. we've been watching that throughout the day. the tension lessening over some of these situations. if you want to see what's been happening, the tension lessening in the situation over ukraine. after russia ended a military exercise. russian president vladimir putin said russia has the right to use force in ukraine and any economic sanctions imposed by the west will backfire. more on that situation in ukraine in just a moment. disney and dish network have struck a long-time carriage
deal. in addition to covering disney networks like disney and espn, it gives access on smartphones, tablets and other devices. the former chairman of the fed thinks the u.s. economy is good for growth of 3% this year. ben bernanke told a financial conference in abu dhabi that the u.s. is in good shape compared to the rest of the world. it was his first public speech since leaving office at the end of january. >> abu dhabi, what do you think? >> 200. >> that's it? >> 250. >> easy. don't you think? >> i don't know. yes, maybe. >> maybe more. >> no. >> 250. because you know the market, right? >> no, i don't. >> this is why he gets -- >> what do you think bernanke gets in abu dhabi. >> way more than 250. >> i thought that's what the president got. >> it's abu dhabi. >> babe ruth made more than the
president. >> we'll do some research. >> okay. for more on the situation in ukraine, our chief international correspondent michelle caruso-cabrera is here. >> good morning. vladimir putin just finished a news conference, kind of a surprise. we walked into the office, here is the video rolling. let's show the video. he's comfortable in the chair as he takes respectful questions from the russian media who i'm sure were invited. the big headline out of this news conference and what brought the futures back sharply is within he said violence -- military force in ukraine is a last resort. that he doesn't want to annex crimea. he said other things like we have the right to do so if we want. it's not a legitimate government. the western diplomats' efforts with the leaders in ukraine are experiments with rats. you know, all those kind of things we expect from him. bottom line, he said that military force would be a last resort. whether we believe him or not, who knows. it's believed in some diplomatic circles that he is looking for a
face-saving way out of this similar, maybe perhaps to when obama was looking for way way out of bombing syria, right? the other question is, was he -- i raised this question with joe yesterday. you were away, becky and andrew, you were, too. when you see the headline in the "ft today" war fears decimate russian stocks. we spend time on the u.s. markets, the global markets, however, the russian markets got hammered in a way that was really tremendous. capital flight happened in that country. the point i was making with joe yesterday, we have all these diplomats, like the adults on the peanuts cartoon making a lot of noise but really with an inability to do anything. capital can move quickly, immediately and send a message right away. did vladimir putin care that all of this capital was leaving the country? we don't know. you've got to think it played into some kind of decisionmaking. bottom line, prosecute a war, mr. putin, it's not going to be on our time. >> $60 billion off of market cap. >> in one day.
>> in moscow. >> what about the ruble? if you factor in the ruble? >> in terms of what they had to defend. >> what they lost. >> they spent $12 million trying to prop it up. >> in even spending that. with the devaluation of the ruble and the loss in their stock market, wonder what it was in u.s. dollars. it was probably more than 12%. >> all the numbers get quoted in u.s. dollars. we are the world's reserve currency. >> 60 billion in market capitalization, 12 billion to prop up the ruble. >> it was punishing. he's a wealthy individual. >> he could cover that. >> how much has come back today. >> not as much, i think. but they are rebounding. >> it was based on the comments he was making that things were picking up. >> the other thing i would add, i would urge caution on believing anything and everything that comes out of the ukrainians. remember, the big fear started yesterday when a ukrainian government official said that there had been an ultimatum. and a lot of our competitors took that as fact and run it without a source.
but remember, the ukrainians and we are sympathetic to their cause, remember, they face -- they think they face an existential threat and they are incentivized to get us inflamed and involved. their going to say things that will be very inflammatory. right? the other thing to keep in mind is, remember, this current parliament is still full of a lot of bandits, okay? all right. these are not necessarily, you know, people without things to be concerned about. >> putin today recalled all the troops 'put them back in the barracks. >> yes. >> but them back to the base. the ukrainian leaders at this point, the people who are there now are suggesting that they want all boots off the ground. does that mean they want the base gone? is there any way that putin will agree to that? >> i don't they think have a legal right to demand the base go away, the same way the cubans can't demand we leave guantanamo. there will have to be a settled solution where russia, if we believe putin, right, that he
doesn't want month move to the border where the russian-speaking majority is. if we believe him, he'll need assurance that he has access to that port. remember, he needs -- russia needs a warm water port so they can ship all year. it's cold in the rest of the country and it gets frozen over otherwise. >> what's his name? >> vladimir putin or yanukovych. >> how do you say his name. >> vladimir putin. >> you said putin. >> she still says putin. >> i eat my ts. >> every t is a d. >> putten. >> you okay with that. >> say button. >> button. >> manhattan, satin. >> we saw a sharp decline. we were just talking about it. i'll tell you again. as tension over events in ukraine intensify. here we are today with a snis snap back and this is all geopolitical and you see these
types of move. joining us now is hans olsen, he's with barclays wealth and investment management and mr. ryan. >> theoretically, the s&p could be -- if it were to go up 16, that would be a new high. we're back in new high territory if we get this open. >> yes. >> that was a one-day thing. >> is it sustainable or not? it's interesting. listening to michelle's outline of what's happened, it's interesting that putin takes a 19th century approach to con applicant and the markets react with a 21st century orientation which sort of brings them back to the table. it really is an interesting juxtaposition. i think we're in early days in this conflict, number one. it's the ebb and flow. and we really don't know where he's going to stop or not stop.
i think it's probably a bit too early to get terribly confident that the rough sailing is through. >> he doesn't know either. a lot of this is testing the waters and seeing what happens. >> that's right. he did it because he could. the question is where does he start to get the big push back? the markets were the first indication of that. we'll see. >> what's more powerful, the markets or the u.s. government? >> i would suggest -- >> the markets, right? we may be toothless but the markets can impact the way he's operating. >> michael, i got -- i was updated on ubs's position on this from my very well managed fas at ubs because of my -- i wanted a swiss bank account, now i have one. i know maybe what you're going to say. they send me your stuff like it comes down really on tablets. they love you. they think you're the man. but do you agree this is just something that you know, we have
to keep in -- not ignore but there's other things that might be more important long term for us here? >> yes. look, do i think this is over? i think there will be more events here. let's keep it in context here. what we're really talking about is not in essence a crisis that blows over through the entire ukraine, it's really about crimea. that's where russia is most interested. it's all about the warm water port, make sure the black sea fleet gets access to open oceans. i i don't think this will weigh heavily on markets. in fact, we see this as having limited financial impact and market impact. it will be a distraction, it will be headlines but we don't think this undermines the recovery in europe or ongoing recovery in the united states, which we think is a more important story here when you're talking about market impact. >> even the people we think ousted yanukovych, even if they want to basically side with the west, even if they end up
prevailing, is there any way crimea doesn't stay really closely aligned with russia and putin? there's just no way. it's thousands of years of that relationship. i don't know. i just think that putin one way or another, there's no way that you're going to break that tie, right? >> yes, joe, i would agree with you. one of the things we talked about, there's three scenarios with. one scenario, seasonally russian troops stop in crimea and main tan a presence, however that presence we want to define it. the second scenario is we maintain their presence in the crimea but there's a destabilization of the government in ukraine. that could be a messier one. the last situation is where the russian influence extends beyond crimea into the main part of ukraine. that's obviously one that's got a lot bigger implications to the world. if you think about all three of those scenarios, we don't see the russians simply unilaterally
withdrawing from crimea. this is too important for them to simply step away. >> the open question is, really, what does, you know, the ukrainian people do with the eastern part of the ukraine. do they start to exert themselves more? is that more of a threat to the ethnic russians in the area which would then be a pretext for putten to do something. the next front would be belarus if you start to exert influence. but you know, the theater, this is just one theater. right? there's another theater of conflict that people aren't talking about at the moment. i was in asia the week before last. and on the cover of "the wall street journal," the asian "wall street journal" is a picture, a map, of essentially a chinese naval flotilla that circumnavigated the philippines. it went around the indonesian islands and basically conducting xer sighs of sorts. that's another exertion of power in waters that are decidedly not
theirs. >> okay. all right, gentlemen, thanks. just good to know that secretary of state kerry thinks our biggest global threat is global warming. do you think that would change in the last two weeks? could he say let me take some of that back. russia, china, they're up there with co2. >> if you saw the warren buffett interview he might have a different view of things. >> thank you. >> i always like e-mailing him stuff. read this. mike ryan, hans, thank you. will threats work on russian president vladimir putin? that's the question or will market forces sway the leader's position on using force in ukraine? we have that story and much more coming up after the break.
welcome back to "squawk box," everyone. the losses from yesterday are more than being made up for in the futures market this morning. you can see the dow futures up
by about 176 points above fair value. s&p futures up by just over 20 points. this is all coming as vladimir putin is pulling back some of the tensions that have been existing with russia and ukraine. he's told the troops there to go back to the barracks and that has obviously calmed a lot of the concerns, at least the immediate concerns. there are still major problems but the immediate concerns seem to have been diminished at least by some bit and the markets are responding in kind. also, take a look at shares of radio shack. the company reported a much larger than expected lots for the fourth quarter. sales falling short of estimates as well. comparable store sales were down 19%. the company announced plans to close up to 1,100 underperforming u.s. locations. and after that big ad in the super bowl, people thought maybe things would be better. that stock is down by 23% this morning. let's dig deeper into the
situation in ukraine with roman popadiuk. and eugene rumer is the director of the russia and eurasia program. i'll talk about somebody that iam bremmer wrote over the weekend about the situation. he said the u.s. ultimately, he compared this situation to what happened in georgia in 2008. u.s. talked a great game but we had no credibility because we ultimately did nothing. ambassador, do you agree with that? >> well, i think we took a number of steps during the georgian situation. those two situations, georgia and ukraine are quite different at this time. if you look at the situation in ukraine, you have a country of 46 million people. at the same time, it's geographic location where it borders four nato countries makes this a special case for the united states and for the european union in terms of concern. so i understand the concept in terms of comparing a russian invasion of georgia and russian
attempts in ukraine right now, but the stakes in ukraine are much greater for the west as well as for the ukrainians as well as for the russians. >> ambassador, that may be true but you look back at what happened and you think to yourself, he talked about in the piece about how everybody sat around in the office with president bush. they went around, can we do something? everybody in the room said no because ultimately it wasn't a politically pal atable thing to do. i'll go to eugene on this. is there something that is politically palatable for him to do in the sense. >> long-term change in our energy policy could, over time, affect russian position. russia is heavily dependent on energy exports. if we liberalize our exports, this is bound to impact russia and their ability to earn hard
currency. >> ambassador, play out sort of putin's end game on all of this. it looks like he's retreating a little bit. is this permanent? in the next couple days, does he do something else? how is he thinking about this? >> first of all, you have to realize we've been focusing so much on crimea that we've lost focus of the goal. his goal is to -- >> it's about the port in ukraine. >> there is a bilateral agreement between ukraine and russia which keeps russia based there to 2042. there is a legally binding agreement. outside of the crimea issue, putin's goal was to rattle the ukrainian government politically. and send signals that ukraine may be too unstable to invest in, thereby creating havoc in the country.
-- to give putin and the russians to play a role in the future make-up of any kind of government. he signalled that today in the sense that there's been talk both at the united nations yesterday as well as today at his news conference about the february 21 agreement that was reached between the ukrainian opposition, ukrainian government and a former president yanukovych. i think putin would like to see some kind of negotiation start which can lead to some kind of coalition/unity government with elections, which would give any kind of russian influence an opportunity to grow in that country and thereby stop the process of moving ukraine toward the west. i think his comments today in terms of stating that he's already asked the troops to end their maneuvers on the western borders of ukraine, all are an indication that right now, the first stage of the process has ended. he's flexed his muscles, shown that he can take action. i think he's willing to start
talking. >> eugene, that would argue that if the ambassador is right that he won the game. >> i agree. i don't see putin stepping back from crimea. i think what's important is that he's sent his troops that were moving about russia on the russian side of the border to their barracks. but it's not at all clear to me that he's sent those paramilitary units, if that's what they were, in crimea, that had effectively denied control of crimea to the government of ukraine back. i don't think the government of ukraine is in control of the peninsula and it's not likely to be so for the foreseeable future. >> okay. >> i think it's a situation that is similar to the situation where the break-away regions of georgia. at this point, putin doesn't need to send troops there. he's pretty much in control there. >> eugene, ambassador, thank you for helping us understand what's going on over there. >> my pleasure.
washington's response to what's going on in ukraine. chris van hollen on big policy questions as well as the budget that will be released, 2015 budget. as we head to break, check out the futures. more "squawk" in just a moment. so our business can be on at&t's network for $175 a month? yup. all 5 of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line, anytime, for $15 a month. low dues, great terms. let's close! new at&t mobile share value plans our best value plans ever for business. tdd# 1-888-628-2419 can take you in many directions. spark your curiosity tdd# 1-888-628-2419 you read this. watch that. tdd# 1-888-628-2419 you look for what's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action
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ellen degeneres made history during the academy awards the other night. this was the picture of the selfie most retweeted in history. it was part of samsung's strategy to work the galaxy note 3 into the programming. "the wall street journal" has a great story about the selfie that promoted more promotional mileage to samsung. it paid $20 million for ads during the show. there are reports that ellen needs to learn how to use this new phone. everybody that thought this was spontaneous, the samsung was there but it was largely because of that advertising budget was promised that they would actually go ahead and make sure it was used during the shows. not a bad idea.
you wonder what tim cook is thinking about all of this. when we come back, we talk about tensions running high in ukraine. our trading block tells us how worried you should be in the currency markets right now. "squawk box" will return after a quick break. means advanced technology. we learned that technology allows us to be craft oriented. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs. siemens designed and built the right tools and resources to get the job done.
[ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
welcome back to "squawk box" on cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. putin says any sanctions imposed by the west against russia will backfire. the tension surrounding the situation in ukraine lessening a bit this morning. the key of what he was saying is that he was pulling back the soldiers in crimea. in the crimea region, he's pulling them back. that is the key headline the markets have taken at least. the obama administration announcing new fuel and automobile rules to cut soot, smog and toxic emissions. it says this will reduce asthma and heart attacks, cutting sulfur in gasoline by 60%.
it's expected to be phased in between 201 and 2025. the compliance schedule was called unrealistic and wrn that the rules will result in higher gasoline prices. broadcasters winning a fight against aero. the startup service that streams television signals over the internet is clearly infringing on the copyrights of broadcasters. that service launched in 2012, available in 13 different markets. customers pay $8 to $12 a month. its backers include barry diller and investor gordon crawford. we take a look at how the situation in ukraine is hitting currencies. energy markets up sharply, today, at least at this point they've given back some. you're talking about wti at 103.52 a barrel. joining us now is boris
schlossberg. the ruble got hammered yesterday. the moscow stock market last about $60 billion in market capitalization. how would you measure the losses to the ruble? >> i think it's hard to measure them precisely. i think the key takeaway is that russia got punished economically rather than politically. maybe that was the key message from yesterday and the key message going forward. my whole thought about all this going on is maybe putin has won the battle right now but he may have lost the war in a sense that russia now is probably going to be viewed as a not trusted agent in the capital markets. i was talking to somebody from lithuania today -- >> when were they a trusted agent. >> they were not a trusted agent in full force but now less so. who would think hard about investing in russia now when you have a lawless society with very little protection over private property. >> how is that different than
where we were last week? you could probably make that same argument last week. people were looking at the gas companies and saying forget about it. because at any time putin could set charges for what they could be charging. >> it's gotten worse. my point is, the actions that happened over the last weekend have, i think, really put a tremendous amount of doubt in investors' minds that will not go away right away. that's why you see, yes, the ruble has bounced back, the russian stocks are bouncing back but long term i think the assets will be under pressure because there will be capital outflow out of that region. investors will punish them more much more than politicians will. >> was that $50 billion wasted on the olympics, all that goodwill? >> amazingly, yes. it was wasted almost through the olympics but now completely -- who's talking about russia as a positive point now? nobody. i think that's probably the takeaway from all of this. is that yes, he's winning the battle but the question is long
term, is he losing the war? >> what does it mean for the ruble specifically? >> i think the ruble goes lower. you'll have more capital flight. russia needs to attract as much capital as possible right now. who's going to invest in russia full force at this point? furthermore, russia is still an oil and gas based economy. the question is, if u.s. can -- people were talking about this on your show earlier, if u.s. can liberalize its export possibilities, all of those actors in europe will be happy to take u.s. gas rather than russian gas as a substitute. >> let's talk about that, the idea that the united states could export more gas and get it over to europe. that is not something that happens overnight. how long would that take. >> to export natural gas would take a couple years. we do have facilities in the gulf of mexico where we're able to export that gas. the issue is the regulations about exporting domestically prowsed gas to europe that would have to be overcome. >> what are the odds, knowing
what you know about washington and congress and how that would have to go? what are the odds that something like that could be cleared? >> well, i think the odds have gone up dramatically here. >> because of this? >> because of the events in ukraine. clearly europe needs to develop alternatives to russia. europe is importing about 30% of its natural gas and crude oil needs from russia. so now if the u.s. really wants to stand behind the eu, this would be a move to liberalize our natural gas exports and our crude oil exports which by the way we could export crude oil tomorrow in big numbers to europe if we wanted to. that would provide some relief to the eu to negotiate with russia. >> so is it fair to see wti at 103, how much of the premium is built in because of the situation in the ukraine? >> i think there's probably only a dollar or two of a premium. now we saw the wti market come off with events this morning. but in addition, if you look at gasoline futures prices, they've
given up all their games from yesterday. >> let me ask you about gasoline prices. we've been talking about a story, some this morning, with regulations in the u.s. to try to strip more sulfur out of gasoline. the industry pushed back and said it would add prices and that the time line is unrealistic. what do you i don't think? >> i think technically the industry can do it. we see lower sulfur levels in japan and europe. they'll have to spend, i this i, tens of billions of dollars in order to do it. ultimately the consumer will pay more. look at california gasoline prices where they have lower sulfur levels than the rest of the country. when we have supply disruptions, gasoline prices spike. i think the consumer will ultimately pay another 10 cents for gas. >> they say 2017 to 2025. maybe 2017 is a stretch but 2025? >> i think there's no problem with 2025. with 2017, consider the inland
refineries in utah, montana or the midcontinent have that have get going now to get their projects and investments in place. if the refining industry moves, all at once to do these investments, you can imagine the factories and the labor pool get stretched. >> becky, maybe by 2025 we'll all be driving teslas and it won't be an issue. >> there you go, boris. >> thank you. coming up, ranking member of the house budget committee, congressman chris van hollen on the president's 2015 budget. then coming up at the top of the hour, the disrupters are back on "squawk box" in a very big way. names you may not have heard of but that will shape the business forever and into the future. andariese horowitz is partners with ben horowitz. he'll tell us about these partners and more. scottrade.
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welcome back, everybody. we've been watching the futures. if you haven't seen yet, turn on the television. the dow futures up by 171 points
above fair value, gaining back the ground that was lost yesterday and then some. jim cramer is warning -- he's just warning be cautious on this. you shouldn't have sold on yesterday's big news and you shouldn't be buying today. >> okay. let's take a look at stocks to watch. if you do, maybe you want to buy something. radio shack posted a larger than expected fourth quarter loss. revenues fell short of analysts estimates. they saw a 19% drop in same-store sales and announced plans to close about 1,100 underperforming u.s. stores. >> remember those ads in the super bowl? the radio shack ads that was we're getting rid of the radio shack of the '80s. >> it's pretty cool. you go into a radio shack these days. >> 1,100 stores to close. >> i've seen some cool stores. the new ones are impressive. i want to just say -- >> wonder how many have had the new makeover? >> i've only seen one.
i thought it was pretty cool. auto parts retailer autozone reported profit of $5.63 a share, beating estimates by 7 cents. same-store sales in this case were up 4.3%. auto zone says the severe weather helped sales because it drove up demand for replacement parts. and tesla gaining in premarket trading says it will open more than 30 new stores in europe. that announcement coming at the geneva voters show. it plans a rapid expansion of the supercharger network in europe. and qualcomm shares increasing as well. added $5 billion to its share repurchase program. qualcomm has been one of those names that, over time -- >> 76 bucks. >> up and up and up. >> qualcomm. qualcomm. >> $124 billion. >> qualcomm. >> 124 billion. >> qualcomm. >> i'm just listening to the qualcomm, qualcomm.
qualcomm. >> coming up next, the president's budget. plus, secretary john kerry will be in kiev trying to ease tensions between ukraine and russia. also, the markets are bouncing back after yesterday's sell-off. will it last? that's the big question. we'll find out where you should be putting your money to work. and venture capitalist ben horowitz will join us. special hour with names that could be the next wall street winners, "squawk box" will be back. >> qualcomm, qualcomm. there's this kid. coach calls her a team player. she's kind of special. she makes the whole team better. he's the kind of player that puts the puck, horsehide, bullet.
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welcome back to "squawk box" this morning. freeport cutting base salaries for two executives. they'll be paid $1.25 million instead of 2.5 million under the new compensation agreement freeport set an overall target compensation of 7.5 million each, including performance based benefits. freeport, like many other mining companies has faced criticism in recent years over high executive compensation at a time when declining metal prices and high costs have weed on share value. the president's 2015 budget being delivered today reigniting the debate over a lot of
different things. there's common ground. representative chris van hollen is a ranking member of the budget committee. he joins us now. congressman, thanks for joining us. you saw the beltway paper, "the washington post" talking about that the republicans and democrats both realize that we need to do things to help people that are in need. it's just that they have different ideas about how to do it. everybody understands that 2014 is a year where we're all talking about this. the budget represents kind of a point where the arguments will be made. >> well, that's right. and specifically, the president's budget will contain an expansion of eitc, the establishment of an earned income tax credit for working single people. there's been bipartisan agreement that this has worked well for people who have families to increase their wages and to encourage work. and so the president's proposing to take that same idea and apply it to single individuals in the workplace as well.
hopefully we can develop some common -- around that idea. >> the idea that people that are childless will get the eitc. >> that's right. as you indicate, the eitc only applies to people with children. this as you say would expand that program which has worked in the past, that tax credit that's worked to others in the work force. >> people want to -- on both sides we want to try to help people that are truly in need. and maybe even budget balancing might be sort of a little less in the foreground, i think, even for congressman ryan at this point. he's still going to talk about how much money is already spent trying to help people and whether it's being well spent. the president will take the 800 billion that's already spent and try to add to that. i think congressman ryan, chairman ryan will say, look, we can do this in a better way. there's a lot of things that
haven't worked. i guess he's going to say, a lot of fat that could be cut. that's a tough sell for people, i guess. >> we should always be looking for ways to make sure the money is spent in the best way possible. i mean, in the most efficient way possible. and so we welcome any ideas that are really intended to do that as oppose to some of the ideas in the past which have been intended to simply cut and shred very important support systems. so, for example, in the past, the republican budget has proposed $800 billion in cuts to medicaid. now, medicaid is already a program where we've seen the lowest increase in per capita costs than anywhere else in the health care market. so that's been squeezed very tight. look, we'll look at every proposal on its own merits. i do hope that on the earned income tax credit proposed that the president has put forward we can come together. the president is focussed in the near term on trying to boost job
growth. over the ten-year window you will see steadily declining deficits. at the end the period i think you'll see a declining debt-to-gdp ratio. that's the right trajectory. >> yesterday we had warren buffett on the program. he said he thinks the proposal would be to boost the earned income tax credit even more, expand that in a bigger way. that's a way to boost wages for people that are working without looking at job losses by raising the minimum wage. how about offering it to a wider variety of people and taking the minimum wage proposal off the table? >> these things are not mutually exclusive. there's no reason you can't work at both ends here. >> is it something you would offer if you did a broad -- not what you're talking about right now, but boosting the income tax
credit in a big way, offering it across the aisle as a way of finding compromise, in instead of looking at one from another. i think that would be something republicans would take on heartily. >> we're willing to consider any ideas republicans put on the table. the president is putting this idea on the table, combines an increase in the minimum wage with boosting the earned income tax credit for childless adults. and so, that's the proposal we put on the table. if our republican colleagues have a different idea, we're open to it. as you indicated, if you dramatically expand -- >> this was warren buffett's idea, not a republican idea. >> got it. got it. i support further expansion of the earned income tax credit. that costs money, right? you have to figure out where are you going to get that money? where are you going to cut elsewhere in the budget? are you going to cut in education? are you going to cut in defense? obviously with the minimum wage that doesn't increase the government budget. look, we're willing to look at
combinations of things but the president has put his idea on the table. if my colleague paul ryan wants to put another idea on the table, we'll obviously take a look at that going forward. >> this is sort of symbol ig on both sides but to me, i was at least a little gratified, republicans think maybe you could do something with corporate taxation and, you know, something with the taxes that are staying overseas and do some infrastructure stuff, maybe they're open to that. at least there are seeds of what looks to be things that could get done. it's symbolic. i wish the president would be more persuasive about corporate tax reform. let me ask you one philosophical question, chris. >> yes. >> that is while we're trying to decide how to help people that need help, there are two thoughts. one is that we don't want to entrench people into dependency. you look at how many people are on food stamps now, how many people are on disability and the
participation rate and all this. you look at that we haven't made that much progress in poverty over the past 20 years. it just is a hard thing to walk down the center. not making it so attractive to people that you induce them to not live productive lives but not also cutting people off that really need help. this is the big discussion that the two sides seem to be having. >> well, that's right. i think you want to look at the impact of all these policies. on work participation and also make sure that people who are really struggling have a support system in place as they continue to either look for a job or to look for a better job. which is why the earned income tax credit approach has been a worthy one, which is why i would like to expand it overall. but certainly expand it as we indicated to childless adults. there are other ways we can also boost the economy. i think that you put your finger
on some area which i would hope would be common ground as well. we need to boost our infrastructure investment in this country in order to remain competitive, in order to compete in this century. i do believe that you can do that as part of international corporate tax reform. there are a lot of different approaches on the table. some are big, you know, money losers. some would increase the deficit. others would not. and so if we can find a way to do it where we don't increase the deficit, and i think the president will have proposals on the table to do that, that may be an area of common ground. >> ukraine, a lot going on there. are you the only person in congress born in karachi? >> no doubt about it. i'm the one american karachi caucus. >> a long line of public service in your family to state and stuff like that. can you help us? what are we supposed to be doing here with the ukraine?
>> with ukraine. >> everyone knows that's important territory in the heart of europe. i think right now, we need to be working very closely. with our european allies to identify right away a whole menu of economic sanctions that we would apply in the event that the russians don't move their troops out of crimea. they can, of course, garrison on their base but they need to evacuate other parts of the crimea. we would have that in place. at the same time, we need to be working with the new government in kiev to make it clear that the west is there to back them up and support them economically. i think we will be considering in congress some loan guarantee packages. i know the administration will be working with the imf. >> don't you think the situation
is compare aible too what happened in georgia in 2008? meaning we talked a great game but were not prepared to do anything? >> in 2008, that was the result. i do think this case is somewhat different because you now have this new government that's come in to kiev. obviously it's gotten the russians very upset. the guy who was just their, sort of, guy in kiev has evacuated to russia. i think there's more potential here. this is actually been a sign of putin's big blunder, right? people talk about how he's playing this big chess game. the reality is, the fact that he moved his troops into ukraine was a major loss for the russians in the sense they never wanted to be in that position. they totally miscalculated. they lost their government, the guy who leaned toward the russians in the government of kiev. after the sochi games, the russians are not looking good.
>> congressman, thanks, appreciate it. >> can you be president? you probably still can't. >> we're looking up -- burning the midnight oil on that. mccain was born in the panama canal area. when we come back, we'll talk about the futures. "squawk" will be right back.
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war games, russian troops pulling back from ukraine's border, crimea remains in play as troops still surround key military bases. the latest on this conflict, what it means for the markets around the globe. meet the next wave of disrupters. companies you may never have heard of but are ready to become household names. software engineer and venture capitalist ben horowitz joins us. he's brought some of the latest investments, the heads of julep, quirky, airbnb and four xwaishg. "squawk" continues right now. ♪ break on through to the other side ♪ >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky
quick and andrew ross sorkin. >> say it slowly. it gives it extra emphasis. i like that. you've exacerbated my name. >> aaron sorkin -- i called you sorkin. you don't know who i'm talking about? i can't remember who that was. they thought his name was andrew ross and his nickname was sorkin. aaron w-- the name would have been a lot better if there wasn't an aaron sorkin. >> i like aaron. >> really? >> absolutely. let's get a check on the futures this morning. they have been moving higher after these latest developments coming out of ukraine. we'll have more on that in just a moment. dow futures up by about 163 points above fair value, more than the market lost yesterday. s&p futures up by 18.5 points,
the nasdaq up by 41 points. russian troops sent on a military exercise in western russia ordered to return to their bases by president putin. markets around the world reacting positively to that development. there is still tension in crimea, where about 16,000 russian troops remain this morning. nbc's jim maceda joins us now from moscow. >> reporter: putin came out and spoke publicly on ukraine for the first time since viktor yanukovych was ousted. so this is a pretty big deal. everybody was on tinder hooks, wondering what tone he would have, what the body language would be like. he rehashed some old ground, calling on the new interim government -- or calling the new interim government in kiev the legal base to what he called on a constitutional coup and said russia had the right to defend
ethnic russians against the threat of ultranationalists operating in kiev and other cities. we've heard this before from others. he added that he saw no need for the use of force in crimea at this time and would only use the military as a last resort. that coupled with the retreat of russian forces back to their bases after putt an nounsed t - announced the end of those russian war games, that could relieve the pressure in a standoff that had been intense. putin at this press conference warned today about sanctions, saying that in today's interconnected world, sanctions can be tricky, can equally backfire on those who impose it. perhaps referring to europe's dependence on natural gas. now, earlier, the kremlin said that it could develop financial ties to compensate any loss
through western sanctions. while putin didn't spell it out, they're getting a clearer idea, andrew, of the end game at least for the russians. go back to the february 21st agreement which calls for a national unity government in ukraine and new elections by december. that's probably a nonstarter but at least leaders now on both sides of the issue are starting to talk again. back to you. >> jim maceda in moscow. smartest guy always. thank you. appreciate it. the crisis in ukraine remains a focus for the markets this morning. joining us now is patrick chovanec. patrick, how big of a deal is this? it's hard to measure but in terms of what it means to the markets. >> geopolitically this is significant.
putin wants ukraine to knuckle under. i don't think he backed away from that economically, it's not as significant. the economic impact, ukraine is a smaller economy than greece, smaller than algeria, smaller than peru. even when it comes to energy, europe is actually insulated from supply disruptions, you know, they've had a mild winter. they have generous stockpiles right now of natural gas if there was a disruption. they also have other alternative means of accessing russian natural gas. i think there was an overreaction in the market yesterday. and i think we're seeing calming down, partly reading into putin's motives but partially also getting back to the facts of what the economic impact would be. >> if there was some sort of change in the game in terms of the tensions between russia and the west, i mean, that would be something that you would have to at some point factor into your planning, correct? >> it casts a very long shadow. you know, the idea of a world in
which the west, the u.s. and europe pitted in a more adversarial relationship with russia going forward, also, we've seen the disruptions, the protests and the ouster of the president of the ukraine has already had an impact on protests in thailand, in venezuela. and of course, china is watching this. they have their own confrontation with japan. they're looking to see how the west responds to this kind of crisis. the geopolitical impact is very significant. >> you're trying to read through what's been happening this morning. it seems to me putin may not even be sure what he is doing. a lot of this is testing the waters, pushing and pulling, seeing what reaction you get for every action. what do you think? >> of course it's hard to know where this is going to go, whether this is part of a larger power grab or if putin is trying to protect basically the interest of russia with the port there. and crimea and natural gas supplies and that sort of thing.
so who knows how this is going to play out in the days and weeks ahead. what i'm focused on, what does it mean for investors. and it brings it back, you know, home for me. you know, it's back to are we achieving escape velocity or can we blame the weak data on the weather? is there something more going on? you know, what does it mean for emerging markets in general? i think what we're seeing in venezuela and the ukraine is a reminder that emerging markets are called emerging markets for a reason. that is that this kind of stuff can sometimes happen, especially when you're getting into a global rebalancing of currency devaluation and then central bank rate hikes and what that does to the economy and it could lead to social unrest in some places. how should em be priced as an asset class. that ill, the larger story here. as far as investors are concerned. obviously geopolitically that's a different thing. >> we did hear that ben bernanke
gave his first speech today, a private speech in abu dhabi. he's looking for the u.s. to have 3% growth this year. it seems like he's shrugging it off. do you buy that? >> economically, the impact is limited on the u.s. economy. obviously the economy in russia and eastern europe, even western europe you could argue if the gas supplies are disrupted. as your other guest says, they seem to have ample inventories right now. for the u.s. economy, i think the economic impact seems to be limited. but that doesn't mean that the economy can't slow for other reasons. you know, it will take a few months for us to get clean data on whether these latest data points that have come in weaker are indeed part of the weather or if escape velocity is this elusive dream that hasn't arrived yet. >> what do you tell investors to do today? this is a lot to try and get your head around. if you're a long-term investor, maybe you write it all off?
>> if you look at the u.s. stock market since the beginning of the year you see a nice "v" shape. big sell-off in january because of jitters from emerging markets and a nice little recovery there. and we're back to new highs. was it all just a bad dream? well, look, we've had a very good earnings season in the u.s. yes, there's been a slowdown from the weather but hopefully the numbers coming out will show a pickup and recovery from that. if it doesn't, of course we have to resit that. but yes, the world is kind of an uncertain and dangerous place right now. i do think we're seeing not just geopolitical uncertainty in some emerging markets but we're also seeing an economic adjustment in places like china, that are going to siened some shock waves through markets and through the global economy. but you know, the u.s. economy i think looks pretty steady right now. >> patrick, thank you so much for coming in today.
great talking to you, too. up next, a roundtable with ben horowitz, software engineer and partner at venture capital. >> this is the big guy. i don't think he's seen a lot of disruption. >> horowitz, andreasen. the roundtable is next. i'll let andrew do this. "squawk box" will be right back. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.
welcome back to "squawk." we are back with ben horowitz, an entrepreneur co-founder of the vc fund, andreasen horowitz. he's the author of a new new book "the hard thing about hard things," building a business when there are no easy answers. the fund has helped fund big names, you know them all, facebook, twitter, airbnb.
two others include julep and quirky. thank you for being here. congratulations. >> thank you for having me. >> you'll be here for the whole hour. i have a lot to talk to you about in a moment. while we have some of your proteges. >> we consider ourselves proteges. >> give us the story of -- these guys show up on your door step. we have viewers who are prurz, wa entrepreneurs, want to be entrepreneurs. how does this all happen? >> i think that, you know, with both jane and ben, the two things we looked for in entrepreneurs are kind of a great idea and a great deal of courage and both of them displayed that throughout their careers and also something we
like to call founder market fit. was this person born and filled their whole life trying to build this company. they almost like can't exist without quirky and julep. i think in both cases, they found us. >> this sounds crazy when you say something like that. if i didn't know ben's story i would think you're blowing smoke. he's 25. to live his whole life to do this. >> may be 27. he started this thing in high school. i want to hear more about jane's story, too. >> yes. >> you literally were doing this in high school. >> yes. i started building products in high school and then i realized i wanted to help other people build products. i do think this is the only thing i want to be doing and the only thing i will be doing. >> which is great. jane, i don't know your story. tell us more about it. >> my parents were korean immigrants and they had a small business growing up. it was something i saw living day in and day out.
and then i worked at bcg doing a lot of sort quantitative analysis, getting my chops there. actually once worked with john legend, who was john stevens at the time but on an analytic, excel spreadsheet project. then i went to work at starbucks, building brands. and julep, i think it's about the mantra, beauty is about us, not competition. >> peter teal always likes to say he doesn't want to invest in anybody under -- is the age 25 or 30? he says there's a cutoff. cannot become a successful entrepreneur after a certain age. he thinks there's money issues, all sorts of disincentives. the older you get. i'm apparently way over the hill for this ever to work out.
do you have a view? >> i probably don't agree with peter on that entirely. i think that there's a lot of things right in what he says. is he super smart. you never want to discount him. there are certain kinds of companies where it helps to be older. diane green when she started vm wear was well into her 30s, if not into her 40s. and neil, when he started workday, he was well over 40. you can't be older than 25 and start a company. >> he was 50. >> the big thing, though, that i think is right is you want, particularly in technology, somebody who has a complete breakthrough idea. the older you get, the harder it is to get to a breakthrough because you get -- kind of the way the world works becomes much more central to your thinking. when you're younger, you go does the world work this way? that's a real thing. >> the week before i pitched
andreasen horowitz, i read something ben had read at a speech, he likes to find dropouts. this was a problem because i had graduated from two schools that my parents supported me going through. and when i showed up i said dropping out of college might be one thing but dropping out of a really big full-time paying job, that's even more impressive, right? >> how big a deal was it for you to get his endorsement? i assume other investors were looking at investing in both of your companies as well? i assume you pressed for good terms. how does this all work out? >> frankly, i didn't care, really. i didn't care about the name. i didn't care about other things. i cared about the style. their style is different. >> it's different. >> can i tell the story of when you invested? >> sure.
>> i pitched the firm. one of the partners basically called me as i was on my way back to my car. we have to meet for coffee right now. he wanted to get the deal done right there because he believed in the business. so it wasn't the rigmarole of back and forth and partner meeting after partner meeting. they knew what they wanted and went after it and that's the way i like to do business. that's why i chose them. >> did you do a sales pitch to them like you've done here before? and like i saw you do in other places, too? >> he didn't break any eggs. >> i didn't break any eggs, actually, no. that predated the zbleg janegg. >> jane, you have nothing for me. we can't talk about my skin or anything? >> we have phenomenal products for you. >> you do? >> if you have cuticles, we have an amazing. >> we do wear make-up. we can do business here. >> we have a modified primer that's great for men going on
air. >> mattefying? >> it's called blank canvas. >> i still get zits, which i like sometimes at my age. >> too much information. >> from make-up, clogging my pores. >> you're not using the right sponge. you have to exfoliate, man. >> that's painful. you, what's your neatest thing you've got? can you talk about it or are you keeping it a secret. >> we're working on cool stuff with ge, the new partnership that will be launching for the summer. >> i was reading about transformers, not those transformers, power transformers. it takes two years to get one of these things. if the grid goes down, we're screwed. can you help with this? >> i tell you what's been really cool since we partnered with ge, there's people that have complaints like that and we're bringing them to the right business units with ge and trying to combine community thoughts with ge scale. they are considering some of
these ideas. >> do you have a product that's come out? or are you working through the stages? >> this is a big, big, big thing, heavy thing coming up in april. >> that sells to consumers? it's a consumer product. >> it's always -- we're going to stay in the consumer world. >> thomas edison, that's a cool ego thing for you, too. >> as much of an ego i can have i go after. >> how much pitches do you see in a given week? >> well, the firm sees 3,000 divided by 52, whatever that number is. i probably see about 6 or 7. >> the best deals you've ever done, have they come through the door or have you had to go to them? >> that's 60 a day. >> come through the door is a little bit of an tough thing. there's a lot of people in the
firm. a lost the good things, somebody knows us, we know them or something of the nature. how they come in i wouldn't say is a great distinction in terms of whether we get them or they come to us. >> are you a republican like mark? can i just ask you? >> i'm not talking politics. >> all right, all right. >> andreasen said something the last time. what was that? >> i don't remember. >> we can have a conversation about carried interest. ben will be sticking around. >> silicon valley, they're all with you. they're not necessarily. >> you know, it's not about being with me or against me. we're all together. coupkumbay kumbaya. >> you have other things coming up. jane, you have future products you're developing. >> in may. >> exfoliating. >> ben will stick around with us for the rest of the hour. coming up -- this is so
rough when you do it, isn't it? it's like sand paper. >> charcoal conjac sponge. >> you know the thing everyone is using. >> clarisonic. >> the latest on the tense situation in ukraine. it's intense here because we have to hit a break. "squawk box" will be right back.
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still to come this morning, dish serving up disney. a major deal that could change the landscape of internet television. and futures are sharply higher this morning after major losses yesterday. we're off the highest levels of the morning but the dow is up 150, the s&p up 16.5 points and the nasdaq up by 3. "squawk box" will be right back.
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welcome back to "squawk box." we're having a conversation around the table. dish network and disney have reached a long-term deal to carry disney on networks such as espn and abc. it's the first time a paid tv operator was given the flexibility by a media company to offer its content over the web. until now, they have not granted cable or satellite tv operators the digital rights to sell their shows outside of a paid tv sub description. also, sony corps has been working on internet tv service. intel's efforts to launch one was recently bought by verizon. shares of jcpenney up
sharply after the s&p raised its outlook on the retailers credit from stable to negative before. saying that sales have turned a corner. secretary of state john kerry arriving in kiev as tensions over the situation in ukraine lessen, at least for the moment. our chief international correspondent michelle caruso-cabrera joins us with more on this situation. >> the futures are higher this morning. i want to show you an s&p futures chart from overnight to show you two events. it was roughly around midnight, 1:00 in the morning where we first got reports that the quote, unquote, military exercise by the russians was over. if you look further to the right from earlier this morning, this is when vladimir putin sits down and starts holding a news conference to our surprise over in russia. and some of the headlines coming out of putin are scary, if you're looking at general media, you'll see things like he threatens war, et cetera, et cetera. he did say inflammatory things but what the markets are reacting to, he said he doesn't want to annex crimea, military
action is the last resort. the sense is that he's walking things back. that's why we see an improvement in the futures this morning. >> you pointed out some of those could be face-saving measures to try and do that. >> yes. there's been a lot of speculation he didn't want to do this. and that he needs some way out, some kind of off-ramp to deescalati deescalation. that's a possibility. i mean, what really happens within the upper echelons of the russian government i'm not so sure. maybe we can get liesman on to talk about that. john kerry is there as we mentioned. he's just arrived. he's going to get this news -- i assume he got some of the news while he was on the plane. and then the offers from the white house in terms of ukrainian assistance, a billion bucks in loan guarantees to offset what will be reduced energy subsidies for the ukrainian people. they'll have to pay more. technical assistance to have free and fair elections, something they've struggled with for decades. help in recovering stolen assets and also if russia takes
punitive trade actions, other ways to help offset the finances. >> would you ever invest in companies in emerging companies in other places? >> we don't. >> you don't? >> no. we don't. you have to understand those markets and cultures and understand those people. it's not that there aren't good investments. you have to know what you're doing. that's our one rule in investing, only invest in what we understand. >> local laws, taxes, that can make it tough. we think we have it tough here. >> the key to investing in europe is only invest in beer drinking countries, never in wine drinking countries. >> good point. >> these are the things you have to understand. >> napa. >> it has its own set of rules and labor laws. >> i thought he was the king of pot. did you see that? >> it's unfortunate. it's a huge -- >> governor moon beam. >> cash crop for us, no taxes.
it's incredible. >> i shouldn't have assumed that governor brown was a stoner. i. >> i feel bad. >> but it is california.. >> i feel bad. >> but it is california.>> i fe. >> but it is california. >> applies to a lot of people. >> can i ask a question? >> yes. >> i have a political question. we were talking about carried interest, talking about some of the private equity guys that made a lot of money in "the wall street journal" this morning. >> where are you on this? >> in carried interest, i think it's not -- it's not fair the way carried interest is taxed today as a capital gain, at least as i analyze it, in that there's no money at risk at least on our part, our carried interest. but the way the law works, it does get into some -- there are nuances to it that are more complicated on the legislation. >> you're prepared to give up carried interest, it sounds
like? >> yes. >> we've had investors come and say you can't give it up. it would change the way capital is put to work in america. is that true? >> it wouldn't be true for me. >> okay. thank you for that. we have news by the way. you can comment on this as well. news in from apple. cfo peter oppenheimer will be retiring at the end of september, he'll be succeeded by the vp of finance, luka maestri. >> i don't think this is a surprise. some were saying it can be a tricky transition when you lose a cfo, this is something that wall street had been potentially expecting. before it had always been oppenheimer and tim cook who were on the calls. last fall they started adding luka on to the calls. that had wall street speculating you could be looking at oppenheimer's retirement.
>> i think within the past 72 hours goldman sachs announced that peter oppenheimer is joining that company's board. >> so duh. >> maybe this will make more sense. >> i read notes from analysts in the last couple of months suggesting that we could be seeing oppenheimer's retirement. >> did you know peter. >> not personally. >> we'll talk to one of your other investments. we welcome the co-founder and ceo of foursquare. he'll join our special guest this morning, dan horowitz, coming up after the break. n man. tdd# 1-888-628-2419 you read this. watch that. tdd# 1-888-628-2419 you look for what's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action tdd# 1-888-628-2419 boost your trading iq with the help of tdd# 1-888-628-2419 our live online workshops tdd# 1-888-628-2419 like identifying market trends. tdd# 1-888-628-2419 now, earn 300 commission-free online trades. call 1-888-628-2419 or go to to learn how.
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welcome back to "squawk box" this morning. we're continuing our disrupter summit. we've been disrupting a lot of things this morning. foursquare, the co-founder and ceo joining us. >> i have a brain you know what. ♪ mr. crowley >> our guest host this morning has ben horowitz. i did pronounce that correctly. that's about all. >> you played a crowley song. ♪ mr. crowley >> i heard it all the time in high school. i don't think about it now. >> the guy said mr. crowley was the lead of the satanist
movement. >> really. >> are you on ozzy fan. >> i'm a music fan. that is a classic song. >> it was an ozzy, not a black sabbath song. >> mr. crowley, black sabbath. that was black sabbath. >> when did you invest in him? >> that's a while ago. >> he was one of your first. was he one of your first investors. >> you came in the second round, 2010. >> was one of our first investments. >> when you were deciding -- i assume there was a lot db at that point there were a lot of people around you. >> yes. it was very competitive. >> when you decide i'm going with ben or going with whomever, how does that happen? >> we knew the reputation of the firm and i knew -- i didn't know a ton about ben at the time but you know, i heard fantastic references. really what was most important is that ben has been involved in running and growing companies. that was the thing we needed the
most help in. we built this thing from 2 people to 10 people, is it going to get to 50, 100. >> you recently took money from microsoft. >> yes, it included money from dfj and money from microsoft, strategic money. >> the last time microsoft invested in something it worked out, it's called facebook. >> i don't think people understand a lot of the stuff that we're building at foursquare. we're building amazing local search tools that are designed to work on these phones that have sensors built into them. >> what does that mean? >> people definitely don't understand. >> explain to people. even the business model at some level has shifted over the past year and a half. >> really quickly, i think a lot of these tools have been designed if you want to use them, you have to think about using them and take them out of your pocket and launch the app and open it up. that's the way we've been using things on the web and mobile forever. i think what's starting to
happen, because of the sensors and the devices, we have the opportunity to be smart and c contextually aware. we know you're in a city you've never been in before, maybe you're out of context. how can foursquare help with this. >> you tell your friends i'm checking in here. right? >> uh-huh. >> i don't want to say you're shifting away from that but in some ways you are. >> check-ins give us today to make amazing search products. >> i don't want to tell everybody where i am all the time. i don't mind telling you write am. >> people can draft in the check-ins of everyone else. we can tell you about the amazing things in omaha because other people have checked in.
>> you have that stupid blackberry. >> lacy did it faster. >> what about google maps? >> i'm still not good at using it. >> oh, my word. >> we have a guy from foursquare who competes against -- what are you doing here? >> if i put foursquare on my phone, when would i use it in. >> anytime you want. anytime you're in a new city and looking for what am i going to do tonight? foursquare will use those places. >> we were just out somewhere where i could have used this. >> write it on your hand. >> it's free. >> it's free. >> it's fantastic. >> i'll do that as soon as i go upstairs. >> i have a different question. look at the transactions that are taking place in the market, whether it's whatsapp, $19 billion or instagram a year ago or what have you. how much pressure have you felt on yourself? how often do you sit there lying either awake at night saying i
should have sold the company? i should sell the company right now? it feels like the whole thing is overheated or crazy. >> there are plenty of opportunities -- >> go through the personal emotions of this experience. >> we've had plenty of opportunities to sell the company. we've turned them down a number of times. you have to look at what we're doing as not a sprn the to get from point "a" to point "b." it's a marathon of building a company. we've amassed an audience, we have great products. companies are starting to generate revenue now. 2012 to 2013 revenue was up 600%. q1 of last year to this year, revenue is up 500%. you can start to see the thing working. >> is there a number? >> at which we'd think about selling? >> right now i can give you a number. >> i'm focused on building products. >> 19 billion i can buy you, can't i? >> that's a conversation for the time. i think there's a --s there an
interesting point of what you're driven by, maybe the exit price or building products you want hundreds of millions of people to use. >> you're on the investor side of this. >> sure. >> you do need exits from this stuff. tell us the behind the scenes conversations you would have about how you even think about an exit. >> some exits, there's a lot of things involved. it starts with what is the size of the market that you're in, really? and how big is it? and then are you going to win? and if both those things are true, generally from an economic standpoint, well, it's a very large market and you're going to win from an economic standpoint, it generally doesn't make sense to sell. this is why is never made sense for google to sell to yahoo!. google was in a much bigger market and they were going to be number one. on the other hand, if you're not going to be number one an a larger company could potentially make you number one if they bought you, then that tends to be an interesting acquisition
opportunity. that's, you know, a rough framework of how to think about it. >> if you don't care about the cycle. right now people says it feels hot. i don't know if it's overheated. you'd want to sell it when it's hot as opposed to when it's cold. >> if selling makes sense, right? google should not have sold to yahoo! even when it was hot. it still has to be in the context of selling the company -- and facebook should never have sold and they didn't because their mark set bigger. >> friend search sold because they weren't going to be number one. that was the key difference. the thing about that framework is, it's not always obvious whether you're going to win or not when you're in the company and this is where conversations might help between an investor and ceo. >> can you write code, dennis? >> i can but not very well. i'm a good prototyper. i could get the prototype to
where i could hire amazing engineers to help build it. >> dennis, i promise the next time i'll pronounce your name. >> crowley. >> i feel like such a dope and idiot. i messed it up. i feel even worse about the situation. thank you for being here. please, come on back. we should have a longer conversation. >> crowley. >> crowley, crowley. >> it's not crowley or crowley. it's crowley. >> it starts with crow, though. it's confusing. that's what it is. the bird. when we come back, we continue our special disrupters the co-founder of airbnb. they're changing the way people rent everything and anything from boats to castles. we'll be back after a quick break.
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welcome back to "squawk box," we're speaking with the entrepreneur and co-founder of the vc fund and the author of the new book "the hard things about hard things building a business when there are no easy answers." >> that's right. >> oh. we are hanging. did you realize we were hanging? >> we introduced him. >> we did. >> and then i thought it was -- >> do you have anything you want to talk about? >> i have a million things that i want to talk about -- >> i bet you it is hard to start from scratch. do you tell people how to do that? >> well, the book is really about -- >> courage and what were the two things you need? >> well, courage and genius. >> courage and genius. those are the two things.
>> damn! >> the genius one is hard. >> which do you think is harder? being an invester on or being an entrepreneur? >> being an entrepreneur is a thousand times harder than being the investor. >> you've been both. >> oh, yeah, yeah, i've been both. >> which do you like better? >> well, the investor is certainly a nicer job. the ceo is a very difficult job. >> personal bankruptcy is always in the background of an entrepreneur, isn't it? it could happen and you need to know it when you're doing it and it's something you need to come to grips with. >> it's not the worst thing. a bankruptcy isn't the worst thing. the worst thing is every smart person you know that you hired that you have to lay off and everybody that likes you has invested in the company including, like, your mom and, like, you're out there and you hughes all their money and all their jobs. >> the most successful ones, it's the which, the third try, how many tries before they finally hit most of the time? >> well, you know, it's, like,
it's random. sometimes you get it on your first try and sometimes you get it on your eighth try. i think dave duffield had built eight companies before peoplesoft. >> i have a question about your recent try which is bitcoin related, your colleague is a big bitcoin fan. are you? >> i have a bet with felix salmon on whether bitcoin is going to succeed or not. >> what does bitcoin look like to you in 50 years? warren buffett think it's gone like tulips. >> wouldn't be surprised if it's gone in 10 to 20 years. he said it ha a tulip feel to it. >> people look at it from a currency stand point and people look it a from a computer science standpoint. >> he was looking at it from the currency stand point. >> the point i understand better is the computer science standpoint and it's a very significant computer science breakthrough in that it solves the problem that we've been trying to solve for 30 years which is how do you transfer not
copy but transfer a piece of digital property from one person to another and that could be a stock certificate. it could be a coin. it could be a piece of digital music. >> but mt. gox just got ripped off, how can you prove that you can hold on to it and it can't be stolen? >> well, that is -- people get -- you know, banks get robbed all the time in the kind of early days of government currency. there are going to be players in the ecosystem, in a distributed e ecosystem that aren't good. >> you are never worried that people will produce fake bitcoins than the algorithm allows? >> that's very unlikely, given that is the computer science breakthrough that you can't fake it and people have been trying to fake it since it came out. for years and years the best security and computer science experts have gone after it with zero success. >> the central bank would never print more currency than it should. never happen. >> all right. when we return hospitality with a twist. n line
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she's kind of special. she makes the whole team better. he's the kind of player that puts the puck, horsehide, bullet. right where it needs to be. coach calls it logistics. he's a great passer. dependable. a winning team has to have one. somebody you can count on. somebody like my dad. this is my dad. somebody like my mom. my grandfather. i'm very pround of him. her. them. that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients...
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i have a lot of questions and i remember i was think it was you did a piece in the weekend "wall street journal" big op-ed piece, someone interviewed you and i was fascinated by it. i get freaked out by sleeping in somebody else's bed. i told becky that. that's the first thing i worry about. it's a simple thing. how do you have quality control with places that people rent in different cities, nathan? >> with you look at our website, you'll see many of the properties have dozens and dozens of reviews by people who have actually stayed there before and through the reviews they are not just saying it's a great place but they are telling a complete story about what their experience was like. but your concern is the same concern that people had in the first year of our business and it did take a while to overcome that but today when you look at the website you can see why it's very easy to get beyond that concern. >> then on the other side, you got the person coming into the
place and you got the person that owns the place with these gross strangers coming in. if your bed isn't skeeved out it will be after they leave. both sides. >> nobody stays in your home without your approval. you get to see their picture, where do they work, why are they coming to town, you can see past review. >> an old picture. fake picture. you can't smell a picture. >> one of the big problem is what local municipalities are doing at this point because they feel like they are losing out on the revenue that they would tax at a hotel if you were staying at a hotel. what happens now? >> well, this is actually really a new opportunity. it's a new activity and it's something that the existing laws and rules didn't anticipate. that doesn't mean it's necessarily a bad thing. and with regards to tax, we think it's an inevitable that this activity is taxed. i mean, do remember that most of our hosts are regular people so they are paying their income
tax. they are paying their local taxes anyways, but as far as any kind of hotel tax, it's something we've gone on the record as saying that we do think our hosts should pay this. now, the issue is that cities built this process for hotels. so, if you go to remit your tax, you're going to be asked questions like what is your hotel name, what is your business license number, that's just not possible for most people. >> and real quick, this is part of what we call the sharing economy, you have a piece of this and you have a piece of lift which is like hoover. this all works because there is no regulation, but do you have to expect and anticipate when you invest in this stuff that will happen? >> you have ten seconds. >> yes, we definitely anticipate that it's going to happen but i think that, you know, this is a case where no regulation really helps the economy. >> it's amazing that you backed it. nathan, just the idea to go through it is just incredible and it is working because you can make a little extra money, stay in paris when you go there.
congratulations and it's amazing to be able to pull it off. we want to thank you this was awesome. nathan, thank you as well. >> go out and get the book. >> yeah. >> and show it one more time, we got three seconds. >> thank you so much for being here. come back and join us again. that does it for us today. make sure you join us tomorrow. it's time for "squawk on the street." ♪ because i'm happy hop along if you feel like a room without a roof because i'm happy clap along ♪ >> good tuesday morning welcome to "squawk on the street" i'm carl quintanilla with simon hobbs and david faber at the new york exchange. cramer is off today. futures are a little happy today. some bounce after vladimir putin deescalates the ukraine situation saying he sees no need for military action, has no plans to annex the crimean peninsula. the bulls will take it. the ten year has been a fear gauge you saw it above two six and europe is trying to get back what it lost yesterday, gold is also down about